The appropriate information on how to administer business can avoid the death of more than 75 percent of Kenya SMEs, which do not survive just five years after the beginning.
According to the figures of the National Statistics Office of Kenya (KNBS), only 10 percent of SMEs can be kept afloat after ten years of its beginning, something that has been mainly attributed to the lack of knowledge in the functioning of companies.
“Most of these SMEs begin with a unclear approach due to the lack of training or tutoring on various issues, such as how to identify the markets and finance management, among others, which leads to immature closure,” said Victor Otieno, managing director of Vifffa Consult, a management consultancy based in Kenya with the SME in Africa in Africa.
Incorrect reasons to start a business
A good number of Kenyan businessmen has wrong reasons or reasons out of place why they want to start a business. Most of them begin with the main objective of earning a lot of money, not responding to anyone, apart from themselves, without looking at the fact that these are benefits that come after a longer period that their business is successful.
The best reason why one would decide to start a business would be to have passion, love and a strong belief in the commercial company where you want to enter. And he has conducted adequate investigation that his product will fill a market vacuum.
It must have determination, patience to be able to achieve it in the business world. Every time you get a challenge, you should give you more motivation to grow.
Mismanagement
Many companies report commercial failures as a result of poor management as the main reason why their businesses fail.
Many new business owners do not have technical knowledge to manage a successful business. This covers from obtaining the best market for the product in question, knowledge to administer a business this is because a large percentage of business owners simply decides to start a relevant experience or have someone to train them.
In order to have a long business useful life, it is recommended that young people or new next entrepreneurs need to obtain basic training on how to manage a business, one could opt for relevant classes or obtain professional consultants who will take it through the steps required for their business to be successful.
Bad management is not alone in line with not having the required skills; It also covers the owner of a business neglecting your business. Each young commercial company needs very care, planning and control of everyday activities.
Insufficient capital
Having constant cash flow is very important for a business. Business owners must make sure when they are making a projected cost of a business.
The majority of the new business owners mostly do not observe the operational costs of their business. This is because they work in the event that their businesses will recover immediately and make great sales without thinking that the business will need some time before making commendable sales.
The incorrect location
The location is an important factor to consider when configuring your business. The incorrect location would mean the death of your business, no matter how good it executes it.
Some of the factors to consider when configuring your business is who your client is, the location of its competitors, the security of the area, if your business really depends on human traffic, it would be important to locate your business where human trafficking can maximum.
An important thing to keep in mind is that if your business does not have constant human traffic, the ideal location for your business would be at home. This will help you reduce rental costs.
Overexpansion
The expansion of a company really does not translate into business success, this is something that many business owners are wrong. Many companies sink as a result of expanding their companies too fast.
Having an established customer base and a constant cash flow is one of the factors to consider before deciding to expand your business.
You must have a careful review and research before deciding that you want to expand your company.
You really have to consider whether your business will continue to run without problems before deciding to expand. It would be quite sad if you expand your business just to completely reduce two or three months later.
Victor continues to add before one decides to assume any commercial company that needs to be well informed and educated in the sector or obtain professional help to ensure that your monetary investment is not wasted.
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